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House Price Crash Forum

Graham :)

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  1. I disagree. If the price is good, at least here in the south east, then you will likely be outbid. I bought a repo for £10k more than the initial price and there was a higher offer on the table when I completed. It was only because the final counter offer was so late in the day and only a £1k increment that I was able to complete anyway, after 2 round of supposedly final offers had already been completed. I've also been outbid on 2 other repossessions, both of which went for significantly more than the initial price (£10k in one case and £15k in the other). The first went for what I believe was a fair price, the second for more than I think it was worth, particularly given the state it was in. I pointed out to the agent that I wasn't going to increase my offer because it would be more economic to offer asking price on the one down the road which is completely renovated. I believe it's the norm for the initial offer to be outbid for desirable homes in good areas, for late and last minute bids and even for bids after the 'best and final offers' have been submitted, surveys completed, mortgages arranged and fees paid. Also bear in mind it is normal practice for a reposession to be on the market with 2 separate estate agents concurrently since the bank must be seen to be getting best and fair price for it. Whereas I don't doubt your agent may not be encouraging offers, someone else may well be, and if they have any morals (which they may well not if they are like many, but not all, of the agents I have met) then even your agent will be trying to get best price for it, even if they already hold the client with the highest offer. The bank, and the original mortgagee is the client and they have instructed them to get market value for it. That's what they're being paid to do and it's not their remit to decide who should buy it and for how much. Having said all that I wish you the best of luck. I don't regret buying my house one bit or the extra £10k i paid for it and I'm sure you won't either, just don't get carried away in the reposession 'auction'. Be realistic about what it might fetch in a free market sale and decide how much you are willing to pay for it in the state it is in. It's easy to get carried away in these situations. I'm naturally cautious but I've seen others pay more than market value in these situations. Graham
  2. It's the same around here (south hampshire), but it has been since 2007. Prices drop slowly and the same homes come and go from the market. People aren't willing, capable or motivated to drop their price. They want best price, because, after all they are either up to their neck in it or they'll have to fork out just as crazy a price for their new home. Sometimes houses would disappear from the market and come back a week or two later at a higher price! And every so often, there is a flurry of sales. Easter comes around, or the end of stamp duty or a flurry of houses will be 100x average wage in 45 days time daily express stories.
  3. The delay is 2-3 months, but reposessions don't generally get published because they are not free market sales. The sale will complete, and doesn't require a buying and selling party to agree its true market value. My house was a repossession its sale price has not been published on the land registry. To do so would indicate that other houses neighbouring would be worth that amount, whereas to do so would undervalue them by 15-20%, which is probably a realistic normal transaction price.
  4. Far from me to query the logic of a prestigious news outlet such as the DAILY EXPRESS but.... - Given that 4 years ago economists were speculating interest rates of 7% and there was good mortgage availability then, and now we have rates 1/14th of that at 0.5% and you need a bucket of cash for a deposit, good credit history and a sprinkle of fairy dust to get a mortgage at present, would it not be fair to say that banks aren't exactly 'fighting' for our mortgage custom right now? - Driving interest rates down from 5.5% to 0.5% makes a big difference to repayments. Dropping it by 0.25% isn't going to make much difference. I read somewhere that 1% interest rate increase results in £100 rise in mortgage repayments per month per £100,000 owed. Lets say you want a £100,000 mortgage as a FTB (for simplicity). That drop is going to save you £25 a month. Not a life saving amount, even if you're on the edge. - Banks are not likely to want to lend money below inflation. For some they already are, but only as a means of meeting their balance sheet requirements. They might as well buy rocks and sell them when they want their money back than lend at below inflation rates. - Isn't more money printing far more attractive to the BoE/the government? The books don't balance for the UK or the US or the majority of Europe. There's only two ways out of that: One is default of some kind (QE or failing to pay up on bonds). The second is to reverse the trade balance in our favour, whilst simulateously reviving our manufacturing industry to meet those needs and shifting the attitudes of the UK/US/Eurozone to consume less and the rest of the world to consume some relatively over priced luxury goods from us. I think multiple default through QE and some kind of 'reset' which allows us to continue to continue to consume more than we produce. And we might well get away with it because the world is corrupt and we can line the pockets of the rich few in the far east. Graham
  5. I wouldn't worry what others think. I bought a reposession in 2009 for £205k, peak price was probably £275k. My first buy, right at the limit of what I *thought* I could afford after reading this site for a few years and holding off and off. A few things I can say in hindsight: - Someone on here once said (I can't remember who) it doesn't matter when you buy but how much you pay. It's probably one of the few valuable things I ever read on here. - Turns out the bank did know best, I probably could have afforded another 50k. I thought they were insane offering me a mortgage that big! Perhaps their more recent mortgage offers are sensible ones. - Once you have paid for the house (with a mortgage) you probably aren't going to care that much about how much it is worth over the next few years as long as you want to live there and can cover the costs of doing so. My 1k a month repayment mortgage doesnt seem so bad compared to the neighbours £950 a month rent. - House prices have nothing to do with economics and everything to do with politics. Forget every economic argument on this site for lower house prices, they're just air! Often they're well thought out and may be true, but it's not about economics. Especially now a small drop in house prices leads to our state owned banks and our government balance sheet going under water. - Waiting isn't all it cracked up to be. You're gambling that prices will fall enough to compensate for compound inflation + anything you would have paid off the balance of the mortgage. Even if you bought at peak at a fair price, within perhaps 5 years you might find that the nominal price has risen back to what it was. And although interest rates might change and you mortgage may get more expensive, your rent will very likely go up with inflation. The absolute balance of your mortgage isn't going to go up! Oh and one more thing. Enjoy your new home. I know I love mine. I never felt I had a home when I rented, because there's no security and little you can do to make it yours. Nothing gets fixed promptly or well. The decor gets neglected as long as the rent keeps coming in. And if there's a gap between what it's worth in a few years and what you paid, well at least you've got something for that gap in price. Enjoy! Graham
  6. My partner also had a call from an estate agent today for a house we looked at a couple of months ago. It's over priced at 265k and the owner clearly has very little motivation to move. When we told him that we thought it was overpriced and that we couldn't put in a offer because a realistic one would be so low that it would not be worth their time, he invited us to make an offer anyway. "What , 10k below asking?" he said. "Hmm, no, our offer would be lower than that" my fiance said. "How much is your offer then?" he said. "205k" she replied. An a long uncomfortable silence followed. Followed by "I don't think they would accept that". Presumably, since it's an actual offer they have to go and relay that to the old lady that her treasured home has had such a derisory offer placed upon it? I have to say I can't stop smiling at the thought of the EA on the other end of the phone or the idea that the owner will have the 'good news' of an offer, only to be told that it is a full 60k less than she was hoping for.
  7. So when will it be? What will be the cause and effect? Do you expect the government would be able to raise the capital to see it through to the next election?
  8. As I understand it inflation is likely to lead to falling house prices in the short term. Wage inflation normally follows price inflation and price inflation follows wage inflation. Since price inflation is the one that is being engineered by the currently elected political bandits then wage inflation will follow it. For instance, the prices down the supermarkets have risen but wages have generally not. They may be a year or more behind the price rises. In this period the spare cash available to people is reduced and it's the spare cash that people spend on their mortgages and rent. Therefore house prices shall fall as soon as there are actually houses for sale. With FTB's not having access to mortgages at the criminally low interest rates and those who own houses not being motivated to sell due to the low cost of servicing debt on SVR then my guess is the smug agents will soon find themselves back in a sticky hole again. Before they had lots of sellers and no buyers. Soon they will find themselves with next to no sellers and no buyers that can meet the demands of the sellers asking prices. Stalemate!
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